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Risks of raising money

- So I recently had a post on LinkedInthat was the most commented upon postI ever put up there.And I've been doing this for a few years.It was interesting, the engagement it drove.The title was something along the linesof The Reasons Why You Should Not Leave Your Jobto Become an Entrepreneur.So we're talking about risk today.So I'd like to get granular around riskand granular around risk of being an entrepreneurbecause being an entrepreneur today,the move to entrepreneurship,is so hot, it's broiling.

It is broiling.And everything I read about it isyou're going to be so much happierthan your corporate job.You're going to be so fulfilled as a person.You're going to be in a small, uncomfortable officefor a very short period of timebefore you have the foosballand the endless beer and the brick wall.And then, you're going to be a billionaire.And that's sort of this, you know, mythologythat's built up around being an entrepreneur.Well, as one who's done itand one who has made the shiftto being an entrepreneur,there are a couple things I want to point out.

Because what I really want you to do isif you're thinking about making this change,I want you to get granular on the riskthat you're taking on.We've talked today about the risk of failure, sure,about the fear of failure, absolutely.What are the things that can lead to failure?So, a few things that I've learnedas I've made my transition to startingand funding Ellevest.Number one, raising money is hard.Raising money is hard.And what I've found, and I've been around for awhile,that even as I went out and was talkingto people about what I saw as an enormous opportunity,investing for women,a well thought out and conceived business plan,a team that was starting to come together pretty well,that I was told my baby was ugly.

And this, by the way, it's hard for men to raise money.Let's face the music.It's harder for women to raise money.You've seen the numbers about venture capitalists.You've seen that we women only get,depending on the study,3%, 4%, 6%, 8%,whatever it is, of venture capital funding.And so really, as you're thinkingabout making that transition into starting a business,what I want you to think hard aboutis what are those sources of funding.For me, it ended up being a lead investorwhom I had known for a period of timewhere our interest, where our ethos,where our view of the issue, the challenge,the problem, the opportunity,were highly aligned,but someone I had known.

And it was individuals that I had gotten to knowthrough the course of my careerover a period of time who likewise saw this issue.There are other sources.There are, of course, angel investors.There's crowdfunding which for us womendoes a terrific job for us.And of course, a final source of fundingwhich is one we very rarely talk about is revenue.It's a form of capital.It's a free form of capital.It's a good form of capital.So also think about getting to revenuesooner than you might otherwise.

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Author

Released

5/6/2016

To create any type of opportunity for ourselves—and our companies—we must take chances. Yet as we progress in our careers those chances can get more intense and scary, causing us to resist taking necessary risks.

What's holding you back? How can you gain the confidence necessary to take risks and chance failing? Sallie Krawcheck is a LinkedIn Influencer and one of the most successful and influential executives in financial services. She has built her career and reputation on thoughtful risk-taking. Here she shares an approach that will help you to take chances while mitigating risk—and keep you on the track to growth and continued opportunity.